Exhibit (d)(12)
CENTURION FUNDS, INC.
on behalf of
Centurion U.S. Contra Fund
INVESTMENT MANAGEMENT AGREEMENT
December 6, 2001
Centurion Trust Company
0000 Xxxx Xxxxxxxxx Xxxx - Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
Centurion Funds, Inc. (the "Fund"), a corporation formed under the
laws of the State of Maryland, confirms its agreement with Centurion Trust
Company (the "Manager") with respect to the Manager's serving as investment
manager of the Centurion U.S. Contra Fund (the "Portfolio") as set forth below.
Section 1. Investment Description; Appointment
The Fund desires to employ the Portfolio's capital by investing and
reinvesting in investments of the kind and in accordance with the investment
objectives, policies and limitations specified in the Fund's Charter dated
August 20, 1998, as amended from time to time (the "Charter"), in the prospectus
(the "Prospectus") and in the statement of additional information (the
"Statement of Additional Information") filed with the Securities and Exchange
Commission (the "SEC") as part of the Fund's Registration Statement on Form
N-1A, as amended from time to time and in the manner and to the extent as may
from time to time be approved in the manner set forth in the Charter. Copies of
the Fund's Prospectus, the Statement of Additional Information and the Charter
have been or will be submitted to the Manager. The Fund desires to employ and
hereby appoints the Manager to act as the Portfolio's investment manager. The
Manager accepts the appointment and agrees to furnish the services described in
Section 2 of this Agreement for the compensation set forth in Section 6 of this
Agreement.
Section 2. Services as Manager; Appointment of Sub-advisers
Subject to the supervision and direction of the Board of Directors of
the Fund, the Manager will:
(a) act in strict conformity with the Fund's Articles of
Incorporation, the Investment Company Act of 1940, as amended (the "Act"), and
the Investment Advisers Act of 1940, as amended (the "Advisers Act");
(b) manage the Portfolio's assets in accordance with the Portfolio's
investment objective and policies as stated in the Prospectus and Statement of
Additional Information;
(c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for securities on behalf of the
Portfolio;
(e) exercise voting rights in respect of portfolio securities and
other investments for the Portfolio; and
(f) monitor and evaluate the services provided by the Portfolio's
investment sub-adviser(s) (the "Sub-adviser(s)"), if any, under the terms of the
applicable investment sub-advisory agreement(s).
In providing these services, the Manager will provide investment
research and supervision of the Portfolio's investments and conduct a continual
program of investment, evaluation and, if appropriate, sale and reinvestment of
the Portfolio's assets. In addition, the Manager will furnish the Portfolio with
whatever statistical information the Portfolio may reasonably request with
respect to the securities that the Portfolio may hold or contemplate purchasing.
Subject to the approval of the Directors of the Fund and, where
required by law, the Portfolio's shareholders, the Manager may engage an
investment sub-adviser or sub-advisers to provide advisory services in respect
of the Portfolio and may delegate to such investment sub-adviser(s) the
responsibilities described in subparagraphs (b), (c), (d) and (e) above. In the
event that a Sub-adviser's engagement has been terminated, the Manager shall be
responsible for furnishing the Portfolio with the services required to be
performed by such investment sub-adviser under the applicable investment
sub-advisory agreement or arranging for a successor investment sub-adviser(s) to
provide such services on terms and conditions acceptable to the Portfolio and
the Fund's Board of Directors and subject to the requirements of the Act.
Section 3. Brokerage
In executing transactions for the Portfolio and selecting brokers or
dealers, the Sub-adviser(s) will use its best efforts to seek the best overall
terms available. In assessing the best overall terms available for any portfolio
transaction, the Sub-adviser will consider all factors it deems relevant
including, but not limited to, the breadth of the market in the security or
commodity interest, the price of the security or commodity interest, the
financial condition and execution capability of the broker or dealer and the
reasonableness of any commission for the specific transaction and for
transactions executed through the broker or dealer in the aggregate. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Sub-adviser may consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-adviser or an affiliate exercises investment
discretion.
Section 4. Information Provided to the Fund
The Manager will keep the Fund informed of developments materially
affecting the Portfolio and the Manager will, on its own initiative, furnish the
Fund from time to time with whatever information the Manager believes is
appropriate for this purpose.
Section 5. Standard of Care
The Manager shall exercise its best judgment in rendering the services
provided by it under this Agreement. The Manager shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Portfolio in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Manager against any liability to the Portfolio or to holders of the Portfolio's
shares of beneficial interest to which the Manager would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or by reason of the Manager's
reckless disregard of its obligations and duties under this Agreement.
Section 6. Compensation
(a) In consideration of services rendered pursuant to this Agreement,
the Portfolio will accrue daily and pay monthly a fee to the Manager at the
annual rate of 1.20% of the average daily net assets of the Portfolio.
(b) The fee for the period from the commencement of investment
operations to the end of the month during which investment operations commence
will be prorated according to the proportion that such period bears to the full
monthly period, and will be payable that month. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month shall
be prorated according to the proportion that such period bears to the full
monthly period and will be payable upon the date of termination of this
Agreement.
(c) For the purpose of determining fees payable to the Manager under
this Agreement, the value of the Portfolio's net assets will be computed in the
manner described in the Fund's current Prospectus and/or Statement of Additional
Information.
Section 7. Costs and Expenses
The Manager will bear all expenses in connection with the performance
of its services under this Agreement, including the payment of salaries of all
officers and employees who are employed by it as well as the payment of the fees
of the Sub-adviser(s). The Portfolio will bear its proportionate share of
certain other expenses to be incurred in its operation, including: investment
advisory and administration fees; taxes, interest, brokerage fees and
commissions, if any; fees of Directors of the Fund who are not officers,
directors, or employees of the Manager or any of its affiliates; fees of any
pricing service employed to value shares of the Portfolio; SEC fees and state
blue sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Portfolio's proportionate share of insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Portfolio's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the Portfolio's shareholders and of the officers or Directors of
the Fund; and any extraordinary expenses.
The Portfolio will be responsible for nonrecurring expenses which may
arise, including costs of litigation to which the Portfolio is a party and of
indemnifying officers and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
Section 8. Services to Other Companies or Accounts
The Fund understands that the Manager and the Sub-adviser(s) may act
as investment advisers to fiduciary and other managed accounts, including other
investment companies, and the Fund has no objection to the Manager and
Sub-adviser(s) so acting, provided that whenever the Portfolio and one or more
other accounts advised by the Manager or Sub-adviser(s) have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each account or company.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the Fund
understands and acknowledges that the persons employed by the Manager to assist
in the performance of the Manager's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the Manager or any affiliate of the
Manager to engage in and devote time and attention to other businesses or to
render services of any kind or nature.
Section 9. Term of Agreement
(a) This Agreement will become effective as of December ___, 2001
("Effective Date"), and shall continue for an initial term of two years from the
Effective Date. Thereafter, this Agreement shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Fund's Board of Directors or (ii) a vote of a
"majority" of the Portfolio's outstanding voting securities (as defined in the
Act), provided that in either event the continuance is also approved by a
majority of Directors who are not "interested persons" (as defined in the Act)
of any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval.
(b) This Agreement is terminable, without penalty, on 60 days' written
notice, by the Fund's Directors or by vote of holders of a majority of the
Portfolio's outstanding voting securities, or upon 90 days' written notice, by
the Manager.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the Act or in rules adopted under the Act).
Section 10. Miscellaneous
(a) The Fund recognizes that directors, officers and employees of the
Manager may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Centurion" as part of their names, and that the Manager or its affiliates may
enter into advisory or other agreements with such other corporations and trusts.
If the Manager ceases to act as the investment manager of the Fund's shares, the
Fund agrees that, at the Manager's request, the Fund's license to use the word
"Centurion" will terminate and that the Fund will take all necessary action to
change the name of the Fund to a name that does not include the word
"Centurion."
(b) This Agreement shall be governed by the laws of the State of
Arizona, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Advisers Act or rules or orders of the SEC.
(c) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(d) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(e) Nothing herein shall be construed as constituting the Manager as
an agent of the Fund.
(f) This Agreement may be executed in counterparts, with the same
effect as if the signatures were upon the same instrument.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the enclosed
copy of this Agreement.
Very truly yours,
CENTURION FUNDS, INC.
on behalf of the
Centurion U.S. Contra Fund
By: ___________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
Accepted:
CENTURION TRUST COMPANY
By: ________________________________
Name:
Title:
